Health Ministry estimates 25% of adult population is already suffering from hypertension while half the population is likely to suffer from diabetes by 2050
Although Sri Lanka is just a few years away from reaching the higher-middle-income band, under the current growth trajectory the country’s per capita healthcare spend of a mere US$ 102 in the year 2013 is significantly below the average per capita for higher-middle-income countries, a new report by Fitch Ratings highlighted last week. According to the report, the average per capita for higher-middle-income countries, is at US$ 465 which indicates immense growth potential in the medium term.
“Sri Lanka’s private hospitals are poised for strong growth, with one of the world’s fastest-growing, ageing populations. Nearly 9% of the population was 65 years of age and over at end-2014. This is likely to double by 2030, and the public sector alone has insufficient capacity to handle the growth,” the agency said in a report on Sri Lanka Private-Sector Hospitals titled ‘Positioned for Sustainable Growth’.
The report said that Non-communicable diseases (NCDs) are on the rise, owing to the ageing population and dietary and lifestyle changes resulting from rapid urbanization whilst expanding the global medical tourism market is a key growth driver for the private sector.
“In 2012, 71% of the deaths were on account of chronic NCDs. Sri Lanka’s Health Ministry estimates that 25% of the adult population is already suffering from hypertension, and half of the population is likely to suffer from diabetes by 2050. These dynamics should be a catalyst for strong demand, given that treatment of NCDs involves long hospital stays and advance procedures,” the report noted.
It elaborated that a key impediment for private-sector growth is the very low penetration in medical insurance where only 4% of the private healthcare spend was attributable to insurance in 2013 whilst congestion at public hospitals and low government investment has created a pressing need for greater private-sector participation.
The report also noted that shortage of skilled medical professionals is a key issue, crucial to attracting patients to the private sector and that Sri Lanka’s hospitals are dominated by the public sector due to government’s policy of providing free universal healthcare.
According to the study, the public sector accounted for 73% of the hospitals and 93% of the available bed capacity as of end-2014, while its share of patient admissions and outpatient visits was higher than 90%. The top five private hospitals account for 45% of the private-sector bed capacity, with most investing in further capacity expansion.
“However, private hospitals have been able to boost their share in hospital beds through capacity expansion at a compound annual growth rate (CAGR) of 21% over the last four years, compared with 10% for the public sector,” the study further outlined.